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A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Economics and Finance".

Deadline for manuscript submissions: closed (31 December 2022) | Viewed by 48059

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Prof. Dr. Peter J. Stauvermann

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Guest Editor

Department of Global Business & Economics, Changwon National University, Changwon 51-140, Republic of Korea
Interests: economic growth; tourism economics; public economics; environmental economics
Special Issues, Collections and Topics in MDPI journals

Dr. Ronald Ravinesh Kumar

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Guest Editor

Department of Economics and Finance, The Business School, RMIT Vietnam, 702 Nguyen Van Linh, District 7, Ho Chi Minh City 700000, Vietnam
Interests: development economics; international trade and finance; financial economics; investment analysis
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

It is my pleasure to invite you to submit a manuscript for the Special Issue on “Financial Development and Economic Growth” for the Journal of Risk and Financial Management.

Financial development is a pivotal part of economic development and growth. Financial system is comprised of various types of financial institutions, and these institutions potentially contribute to the expansion of financial services and financial development. Financial development can directly or indirectly influence economic growth. Various measures of financial development have been proposed.

This issue welcomes studies on financial development viz. economic activities and the potential of financial development to enhance economic growth. The issue aims to attract papers that examine the role of financial development at macro or micro levels. Studies can consider the conventional or contemporary measures of financial development, can be country-specific or region-based, can examine the direct or indirect contributions of financial development, and can strives towards proposing sound strategies to make financial system growth-enhancing. In this regard, papers submitted should maintain a good balance between the appreciation of relevant existing literature, the appropriateness of methodology and analysis leading to result-based policy implications, and the efforts to make some novel contributions in the field of study.

Prof. Dr. Peter J. Stauvermann
Dr. Ronald Ravinesh Kumar
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

financial development
profitability, stability, competition, and performance
macroeconomic factors
structural factors
socioeconomic factors
market structure
commercial banks
nonbank financial institutions
financial inclusion
remittances and other financial flows
financial statement analysis
savings, investment, consumption, human capital
country-specific or region-based analysis
empirical analysis
theoretical analysis

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Published Papers (13 papers)

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Research

7 pages, 217 KiB

Open AccessArticle

Exploring Access to Financial Services by Visually Impaired People

by Sam Goundar and Milind Sathye

J. Risk Financial Manag. 2023, 16(2), 96; https://doi.org/10.3390/jrfm16020096 - 6 Feb 2023

Cited by 5 | Viewed by 3373

Abstract

Though consumers with vulnerabilities, such as visually impaired or blind and partially sighted people (BPSP), face several marketplace problems and challenges, existing literature provides limited guidance. The present study aims to examine the issues faced by BPSP in accessing financial services in Fiji. The study is grounded in the digital divide literature and reports that BPSP do face many hurdles in accessing financial services. We suggest that appropriate policies and industry initiatives could help mitigate the severe vulnerability faced by this cohort of the population in Fiji. We envisage that similar studies in other developing countries are required on an urgent basis to understand the international ramifications of the problem. Full article

(This article belongs to the Special Issue Financial Development and Economic Growth)

11 pages, 278 KiB

Open AccessArticle

Empirical Research Study on the Determinants of Market Indicators for 41 Financial Institutions

by Larissa M. Batrancea and Alin Fetita

J. Risk Financial Manag. 2023, 16(2), 78; https://doi.org/10.3390/jrfm16020078 - 28 Jan 2023

Cited by 5 | Viewed by 1975

Abstract

Economic development must consider the evolution of the banking system in general, and the evolution of individual banks on capital markets in particular. As these financial institutions are catalysts for national economies and economic development, studying the main determinants of their market indicators is both timely and important. This research investigated the impact of various financial ratios on market indicators for a sample of 41 financial institutions during the period of Q4 2013–Q4 2021. The empirical results showed that market indicators were mainly influenced by ratios such as return on assets, total debt to assets ratio, and total debt to total capital. In light of these results, management teams in the banking system are called upon to monitor aspects related to bank revenue and bank performance with the purpose of obtaining solid market indicators and attracting potential stock market investors. Relevant policy implications regarding the market performance of listed financial institutions are also addressed. Full article

(This article belongs to the Special Issue Financial Development and Economic Growth)

30 pages, 1247 KiB

Open AccessArticle

Financial Inclusion in West African Economic and Monetary Union’s Economies: Performance Analysis Using Data Envelopment Analysis

by Pawoumodom Matthias Takouda, Mohamed Dia and Alassane Ouattara

J. Risk Financial Manag. 2022, 15(12), 605; https://doi.org/10.3390/jrfm15120605 - 14 Dec 2022

Cited by 2 | Viewed by 2335

Abstract

A data envelopment analysis (DEA) has yet to be chosen to assess countries’ financial inclusion levels. We introduce an application of the DEA methodology to compute aggregate performance measures regarding the financial inclusion of economies. We specifically explore composite scores based on relative efficiency, super-efficiency, and cross-efficiency approaches. We implement the proposed procedure to study the financial inclusion in nations from the West African Economic and Monetary Union (WAEMU). We use the Union’s Central Bank’s financial inclusion data from 2010 to 2017. We obtain robust financial inclusion level measures, showing that overall, in the Union, there have been steady improvements during the study period, but with heterogenous behavior at the level of each economy. A benchmarking analysis allowed us to determine the countries with the best practices. For the remaining nations, we find their reference countries. Finally, we identified which financial service sectors drive the financial inclusion in each country from the optimal weights of the DEA model. Full article

(This article belongs to the Special Issue Financial Development and Economic Growth)

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13 pages, 1237 KiB

Open AccessArticle

Carry Trade and Capital Market Returns in South Africa

by Lumengo Bonga-Bonga and Sefora Motena Rangoanana

J. Risk Financial Manag. 2022, 15(11), 498; https://doi.org/10.3390/jrfm15110498 - 27 Oct 2022

Cited by 2 | Viewed by 2014

Abstract

This paper assesses the extent to which carry trade operations affect the performance of equity and bond markets in a target country, South Africa, by considering the US and the euro area as the funding countries. A two- and three-factor capital asset pricing model (CAPM) is employed to assess whether the pricing of equity and bond markets in South Africa depends on the US dollar/rand and euro/rand carry trade returns. Moreover, the paper uses the quantile regression technique to assess whether this pricing varies with the distribution of the equity and bond returns. The findings support that the US- and euro-funded carry trade are essential factors for the pricing of equity and bond markets in South Africa. Moreover, the results of the two-factor model show a negative relationship between the equity excess return and the US-carry trade returns at lower quantiles of the equity market returns. The positive relationship is observed in the upper quantiles of the equity market. The negative relationship means that carry trade activities reduce equity market returns during a bear market as investors close out their position when conditions in the equity market become unfavourable. The results of the three-factor model, controlling for the global volatility or uncertainty, show that carry trade investors exit the equity market to invest in the bond market when global uncertainty rises. This finding shows that carry trade investors choose less risky assets during rising global uncertainty. Full article

(This article belongs to the Special Issue Financial Development and Economic Growth)

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16 pages, 1690 KiB

Open AccessArticle

An Analysis of the Effects of Public Investment on Labor Demand through the Channel of Economic Growth with a Focus on Socio-Professional Categories and Gender

by Mame Cheikh Anta Sall and Adriana Burlea-Schiopoiu

J. Risk Financial Manag. 2021, 14(12), 580; https://doi.org/10.3390/jrfm14120580 - 2 Dec 2021

Cited by 4 | Viewed by 2867

Abstract

The paper aims to analyze the impact of public investments generated by implementing the Emerging Senegal Plan (ESP) on economic growth and gender inequalities observed in the labor market in Senegal. A dynamic computable general equilibrium modeling was carried out for this purpose using a social accounting matrix (SAM) based on an extensive segmentation of the labor market according to gender and socio-professional category. The results prove that the investments made in priority market sectors led, overall, to a good trajectory of economic growth. Moreover, job creation followed the expansion of sectors of the economy, which increased their demand for labor because of the capital increase. In conclusion, there is a strong demand for qualified women (senior executives and middle executives). We recommend considering positive discrimination in favor of women by implementing public employment programs and the importance of recovery sectors affected by the pandemic. Full article

(This article belongs to the Special Issue Financial Development and Economic Growth)

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10 pages, 1494 KiB

Open AccessArticle

Evaluation of the Financial Performance of the Municipalities in Slovakia in the Context of Multidimensional Statistics

by Jozef Lukáč, Katarína Teplická, Katarína Čulková and Daniela Hrehová

J. Risk Financial Manag. 2021, 14(12), 570; https://doi.org/10.3390/jrfm14120570 - 25 Nov 2021

Cited by 8 | Viewed by 2427

Abstract

In some studies, only financial aspects are emphasized, but we also see cases of assessing the financial health of municipalities through socio-economic indicators. Public organizations worldwide have had to increase their financial performance by adopting management practices. Nonetheless, financial performance might be mostly predicted by contingencies that are not within direct managerial control. The purpose of this paper is to identify clusters of municipalities on the basis of agglomerate cluster analysis, the results of which will point to the financial situation of the municipalities in the selected region. The main aim of this contribution is to identify the location of the municipalities of the chosen self-governing region of Slovakia using the clustering method by selected financial indicators. Individual clusters have similar properties and they differ from the characteristics of businesses in other clusters. The results show that organizational and environmental contingencies affect financial performance, but a significant amount of variation in financial performance is unexplained—indicating that management creates better financial health in the municipality and creates a clearer budget for the management, employees, and residents of the municipality. Full article

(This article belongs to the Special Issue Financial Development and Economic Growth)

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24 pages, 355 KiB

Open AccessArticle

The Nexus between Financial Development and Economic Growth: Panel Data Evidence from Developing Countries

by E. M. Ekanayake and Ranjini Thaver

J. Risk Financial Manag. 2021, 14(10), 489; https://doi.org/10.3390/jrfm14100489 - 14 Oct 2021

Cited by 18 | Viewed by 5905

Abstract

The objective of this study is to investigate the nexus between financial development (FD) in economic growth (GROWTH) in developing countries. The study uses panel data from 138 developing countries during the period 1980–2018. The relationship between financial development and economic growth is investigated using four explanatory variables that are commonly used to measure the level of financial development and several other control variables, including a dummy variable representing the financial and banking crises. The sample of 138 developing countries is also classified into six geographic regions. We have carried out panel unit-root tests and panel cointegration tests before estimating the specified models using both Panel Least Squares (Panel LS) and Panel Fully Modified Least Squares (FMOLS) methods. In addition, panel Granger causality tests have been conducted to identify the direction of causality between FD and GROWTH for each of the regions. The results of the study provide evidence of a direct relationship between FD and GROWTH in developing countries. Furthermore, there is evidence of bi-directional causality running from FD to GROWTH and from GROWTH to FD in samples of Europe and Central Asia, South Asia, and all countries, but not in East Asia and Pacific, Latin America and the Caribbean, Middle East and North Africa, and Sub-Saharan Africa. Full article

(This article belongs to the Special Issue Financial Development and Economic Growth)

26 pages, 1042 KiB

Open AccessArticle

Causality between Energy Consumption and Economic Growth in the Presence of Growth Volatility: Multi-Country Evidence

by Gulasekaran Rajaguru and Safdar Ullah Khan

J. Risk Financial Manag. 2021, 14(10), 471; https://doi.org/10.3390/jrfm14100471 - 7 Oct 2021

Cited by 9 | Viewed by 2745

Abstract

Falling energy intensity (increasing efficiency) is believed to be a result of more efficient production methods that have evolved over time, indicating overall sustainability in the production process. The objective of this study is to investigate the diminishing trend of energy intensity and the related volatilities in growth of energy consumption and income growth through the energy–growth nexus. The country specific long-run and short-run causal relationships among real energy consumption per capita, real GDP per capita, and the volatilities of growth in income and the growth in energy consumption are established using the method proposed by Yamamoto–Kurozumi within a cointegration framework in 48 countries. The overall findings suggest that energy intensity is falling, in conjunction with the existing evidence on the energy–growth nexus in most of the countries studied; hence, implicitly this confirms sustainability. The results based on volatility analysis show a significant decrease in energy use in response to increasing income growth volatility. The negative effects of income growth volatility on energy consumption are usually countered through compensation measures, with subsidies provided to households and producers in order to smooth the energy consumption behaviours in those economies. Full article

(This article belongs to the Special Issue Financial Development and Economic Growth)

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19 pages, 1403 KiB

Open AccessArticle

Revisited: Monopoly and Long-Run Capital Accumulation in Two-Sector Overlapping Generation Model

by Ronald Ravinesh Kumar and Peter J. Stauvermann

J. Risk Financial Manag. 2021, 14(7), 304; https://doi.org/10.3390/jrfm14070304 - 3 Jul 2021

Cited by 6 | Viewed by 2521

Abstract

In this paper, we investigate if an increasing competition in an oligopolistic market will enhance the real incomes and consumer surplus in the long run. For this purpose, we apply a two-sector overlapping generation model in which members of the young generation own the oligopolistic firms. We show that increasing competition in the oligopolistic market leads to ambiguous outcomes regarding the real income and consumer surplus in the long run. However, we show that the distribution of income will become fairer if the competition increases, but it is possible that the price for a fairer distribution is a lower income for all members of the economy. Full article

(This article belongs to the Special Issue Financial Development and Economic Growth)

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15 pages, 334 KiB

Open AccessArticle

Financial Performance of Iranian Banks from 2013 to 2019: A Panel Data Approach

by Pejman Ebrahimi, Maria Fekete-Farkas, Parisa Bouzari and Róbert Magda

J. Risk Financial Manag. 2021, 14(6), 257; https://doi.org/10.3390/jrfm14060257 - 8 Jun 2021

Cited by 1 | Viewed by 3004

Abstract

It is widely believed that the financial system is dependent on the banking industry, and its strength and development are vital for economic prosperity. This paper tried to show the financial performance of Iranian banks listed on the Tehran Stock Exchange (TSE) during 2013–2019, as the research population. The statistical population included 18 banks listed on the TSE from 2013 to 2019, which were sampled using a screening method. The results indicated a significant relationship between explanatory variables of capital ratio and the financial performance of banks in all models. However, a significant negative relationship was found between the inflation rate and the financial performance of banks in all models. Furthermore, it seems that banks with high asset strength are more profitable than the others. Regulators should guarantee that banks remain highly capitalized for a viable banking sector in Iran. Full article

(This article belongs to the Special Issue Financial Development and Economic Growth)

30 pages, 11173 KiB

Open AccessArticle

The Heterogeneous Impact of Financialisation on Economic Growth in the Long Run

by Agne Setikiene and Mindaugas Butkus

J. Risk Financial Manag. 2021, 14(5), 209; https://doi.org/10.3390/jrfm14050209 - 5 May 2021

Cited by 1 | Viewed by 3667

Abstract

Financialisation, i.e., the process by which financial markets and their participants gain more influence over the functioning of enterprises/companies and the framework of the financial system, changes the functioning of the economic system, both at the macro- and microeconomic level. There is no doubt that financialisation impacts economic growth. Still, research does not substantiate the heterogeneity of financialisation effects and does not provide a comprehensive analysis of the sources of heterogeneity. In most cases, researchers provide only theoretical insights into what may lead to different effects of financialisation on economic growth. This study empirically examines whether institutional quality and economic development intermediate the relationship between financialisation and economic growth using a panel of 96 countries over the period of 1996–2017 and least squares dummy variables (LSDV) estimator. We found that the impact of financialisation on economic growth differs across countries and that institutional quality and economic development are the sources of the heterogeneous impact of financialisation on economic growth. Full article

(This article belongs to the Special Issue Financial Development and Economic Growth)

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23 pages, 5205 KiB

Open AccessArticle

The Relationship between Yield Curve and Economic Activity: An Analysis of G7 Countries

by Ronald Ravinesh Kumar, Peter Josef Stauvermann and Hang Thi Thu Vu

J. Risk Financial Manag. 2021, 14(2), 62; https://doi.org/10.3390/jrfm14020062 - 2 Feb 2021

Cited by 6 | Viewed by 5443

Abstract

The yield curve is an important tool to assess the economic progress of a country. In this study, we examine the strength of the relationship between term spread and economic activity, and between the components of the yield curve and economic activity in the G7 countries using monthly data on yield rates and seasonally adjusted data on the industrial production index (IPI). After matching the start and end date of the IPI with the yield rates, the data used and respective time period are as follows: Canada: March-1994 to December-2018, France: January-1999 to December-2018, Germany: October-2005 to December-2018, Italy: July-2009 to December-2018, Japan: July-1994 to January-2019, the UK: January-1994 to December-2018, and the US: February-1990 to January-2019. The results show positive associations between term spread and economic activity for Canada, France, Germany, Japan, the UK, and the US. For Italy, a negative association is noted. All three empirical factors could predict economic activity for France and Germany at the 12-month horizon only. For all other horizons, the factors’ ability to predict economic activity varies. We observe that by including additional macro-finance variables such as the current economic growth rate and the 3-month yield rate to capture the term structure level effects, the relationship between term spread and economic activity becomes stronger. This implies that the usefulness of yield curve and its decomposed components for the purpose of predicting economic activity should be cautiously modelled and employed for policy. Full article

(This article belongs to the Special Issue Financial Development and Economic Growth)

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16 pages, 598 KiB

Open AccessArticle

Effect of Fisheries Subsidies Negotiations on Fish Production and Interest Rate

by Radika Kumar, Ronald Ravinesh Kumar, Peter Josef Stauvermann and Pallavi Arora

J. Risk Financial Manag. 2020, 13(12), 297; https://doi.org/10.3390/jrfm13120297 - 29 Nov 2020

Cited by 12 | Viewed by 5347

Abstract

We analyze the effect of fisheries subsidy negotiations on financial markets and aggregate demand in developed and developing countries. We examine the plausible scenarios that are likely to emerge in the event of elimination or reduction of subsidies, and the subsequent effect on the financial markets and the fish production. We use the Keynesian macroeconomic static framework, which is based on an extended well-known investment-savings (IS) and liquidity preference–money supply (LM) model for analysis. Our analysis shows that the impact of a reduction in fisheries subsidies would reduce the exploitation of fish and marine resources in developing countries, thus leading to a general increase in fish prices and quantity stabilizing at lower levels. We also find that this effect would transfer to financial markets, leading to a decline in interest rates for fish exporting developing countries, but interest rates tend to stabilize at higher levels for fish importing developed countries. Full article

(This article belongs to the Special Issue Financial Development and Economic Growth)

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